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E.C.I.C. HEALTH FOUNDATION POLICY-PROCEDURE
Title: PUBLIC DISCLOSURE POLICY No. 04
Original Date: January 26, 2012 Revised From: ______________
Acknowledgement: The substance of this policy is taken directly from the IRS training video online.
Policy: E.C.I.C. Foundation will follow the IRS requirements for public disclosure including
- which records are open to public inspection
- when and how to tell donors of the fair market value of the goods or services you are providing in exchange for their contributions; and
- how to provide donors with written acknowledgements of their contributions so they will donate again.
In return for being tax exempt and receiving tax deductible contributions, Congress requires 501(c)(3) organizations to disclose information about their organization to the public.
A. Public Inspection Rules:
Annual returns for three years after the due date, including any extensions:
- All Form 990 schedules (except Schedule B), attachments, and supporting documents
- Application for exemption and all supporting documents:
Form 1023 , if you filed the form on or after July 15, 1987 Letter from the IRS ruling that your organization has tax-exempt status. We will disclose these documents on the day we are asked for them. Our office is located at 1403 Leadore Avenue Salmon, Idaho. In addition to permitting inspection of these documents, we will provide copies of the information requested, whether the request is made in person or in writing. Only a reasonable fee to cover the cost of the copies will be charged. E.C.I.C. will post the information on the Internet, and refer requesters to the website. Paper copies available for anyone who wants to inspect but does not want to make copies. We will not share...
- Schedule B of Form 990/990-EZ - You do not have to identify your contributors by name—only the amounts and natures of the contributions.
- Unfavorable rulings, such as an earlier denial of tax-exempt status.
- Certain types of information that the IRS approved withholding, such as trade secrets, patents, processes, styles of work, and national defense material
Public Inspection Rule
- We will comply with these public inspection rules in order to avoid penalties for refusing to provide copies of certain records. $20 for each day of noncompliance, up to a maximum of $10,000, or if failure to comply was willful, a penalty of $5,000 per return or application!
- We do not have to disclose the names of our contributors, only the amounts and natures of the contributions. We are required to disclose three year's worth of annual returns.
- We will make the returns available on ecicfoundation.org and direct the person to that site. Otherwise, we will send the returns within two weeks of receipt of copy cost payment. We will charge .10 cents per page, plus reasonable shipping and handling fee received in advance of the documents being mailed.
B. Quid Pro Quo
- Quid pro quo is Latin. It means “something for something.” A contribution made by a donor in exchange for goods or services is a quid pro quo contribution. If we get a donation greater than $75 and give the donor something in return, you must disclose the value of that something to the donor. Example: In your organization’s annual fundraiser, you ask a donor to give $100. In return, you give the donor a concert ticket that has a fair market value of $40. Because the donor’s payment exceeds $75, you must give the donor a written disclosure statement for the value of the concert ticket.
- Donors can only claim a deduction for the amount they contributed above the amount of the goods or services they received. Donor gives $100. Donor receives $40 concert ticket. Donor claims $60 for charitable contribution. Our written statements will capture the attention of donors without fine print!
- The IRS will assess a penalty on our organization if it fails to provide a written disclosure statement at the time of solicitation or upon receiving the contribution. $10 per contribution, up to $5,000 per fundraising event or mailing.
Exceptions to the Rule
- Tokens –
Insubstantial goods or services an organization provides in exchange for contributions. (Goods and services are considered insubstantial tokens if these three things are true:
* These dollar amounts are for 2010. Guideline amounts are adjusted for inflation. Contact IRS Exempt Organizations Customer Account Services at (877) 829-5500 for annual inflation adjustment information.)
- The donor gave at least $48*;
- The item bears the organization’s name or logo (think calendars, mugs, or posters); and
- The item does not cost more than $9.60*.
- Membership Benefits –
Annually recurring rights or privileges (membership benefits) that result from an annual membership payment of $75 or less. (Examples of membership benefits you do not need to disclose:
- Free or discounted admissions to the organization’s facilities or events
- Discounts on purchases from the organization’s gift shop
- Free or discounted parking)
- Intangible Religious Benefits – Benefits that are for religious purposes only and are not usually sold commercially. (Examples of religious benefits you do not need to disclose:
- Admission to a religious ceremony
- Very small tangible benefits, such as wine used in a religious ceremony)
- Contents of the Quid Pro Quo Disclosure Statement. We will tell the donor that he or she can only claim the contribution amount that exceeds the fair market value of the goods or services provided. Example: Dear [Donor]: Thank you for your cash contribution of $150 that E.C.I.C. foundation received on [date received]. In exchange for your contribution, we gave you a cookbook worth an estimated fair market value of $25. Therefore, for Federal income tax purposes, your contribution deduction is limited to $125. Thank you again.
Non-Quid Pro Quo Acknowledgments
If we do not give a donor something in return for his or her contribution, we do not have a disclosure requirement. However, a donor cannot claim a tax deduction for any contribution unless he or she maintains a record of the contribution in the form of either a bank record (such as a canceled check) or a written communication from the charity showing the name of the charity, the date of the contribution, and the amount of the contribution. In addition, without a written acknowledgment from you, donors cannot claim a tax deduction for any single contribution of $250 or more. Although it is a donor’s responsibility to obtain a written acknowledgment, E.C.I.C. foundation will assist the donor by providing a timely written statement.
Written Acknowledgment Details
- Name of the organization
- Date of the contribution
- Amount of any cash contribution
- Description (but not value) of noncash contribution
- Statement that no goods or services were provided by the organization in return for the contribution, if that was the case
- Description and good faith estimate of the value of goods or services, if any, that an organization provided in return for the contribution
- Statement that goods or services, if any, that an organization provided in return for the contribution consisted entirely of intangible religious benefits, if that was the case
- Sample acknowledgment: “Thank you for your cash contribution of $300 that E.C.I.C. foundation received on December 21, 2006. No goods or services were provided in exchange for your contribution.”
- The acknowledgement letter will be sent to the donor no later than January 31 of the year following the year of the donation. Donors must receive the acknowledgement by the earlier of 1) the date on which the donor files his or her individual tax returns for the year of the contribution, or 2) the due date of the return (including extensions). E.C.I.C. Foundation will provide a paper copy of the acknowledgment, or electronically through means such as an email address. (copy fees pd in advance as described above).
Acknowledging Donors' Unreimbursed Expenses
If a donor makes a single contribution of $250 or more in the form of unreimbursed expenses, such as out-of-pocket transportation expenses to speak at a conference your organization sponsored, we will send the donor a written acknowledgment letter, and the donor should keep good records of the expenses. The acknowledgement letter will include:
- A description of the services provided by the donor
- If goods or services were provided in return for the contribution, a description and good faith estimate of the value of those goods or services
- A statement that no goods or services were provided in return for the contribution if that was the case, to the donor.
D. Other Disclosure Rules
If our foundation offers to sell goods or services that are available free from the Federal government, we will disclose that fact in a conspicuous and easily recognizable format without fine print! There are penalties for any organization that intentionally disregards the requirement. The penalty is the greater of $1,000 for each day the failure occurred, or 50 percent of the total cost of all solicitations that were made by the organization the same day that it failed to meet the requirement.